The taxpayer will be left with a multi-million bill following the collapse of electrical retailer Comet according to the administrator Deloitte. With the remaining 50 Comet stores due to close today it appears there is insufficient money left in the coffers to honour statutory redundancy payments to the chain’s 6,000 staff, leaving the government to pick up the bill.
In addition, unsecured creditors are likely to receive nothing. These include HMRC which is owed £26.1 million, ITV which is owed £1.2 million and Google which is awaiting payment of £602,000. Secured creditors will be paid something but it is thought there could be as much as a £95 million shortfall on the amount Comet owed before it entered administration.
The administrators also reveal that Comet suffered losses of £95 million in the year up to April and a further £31 million in the following five months when it became clear to credit insurers that the chain represented too great a risk. Around 20 of Comet’s 236 stores have been acquired by rival retailers while the brand itself may survive as an online retailer.
The collapse of Comet comes at the end of a year which has seen a number of familiar retail names disappear leaving increasing numbers of unoccupied commercial properties on our high streets. While recent economic forecasts point towards a slow recovery and pre-Christmas trading is reported to be brisk, few expect this situation to improve dramatically in the short term.
Many retailers will be pleased to see the back of 2012 and will be hoping for better fortunes in the coming year. Will 2013 mark the beginning of the overdue long term recovery that we have all been waiting for, or will yet more high street chains encounter difficulties in the New Year? We will have to watch this space.
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